Roti gets $23 million from Valor Equity Partners – Consumer News

on Feb28

28 February 2018 | 6:29 pm

Roti Modern Mediterranean, the Chicago based, fast-casual Mediterranean chain, said it has agreed to a $23 million equity investment by Valor Equity Partners, a Chicago firm increasingly interested in the intersection of food and tech.

The investment will go toward national expansion and use of technology, including Eatsa, a San Francisco company that helps restaurants automate.

In October, Lettuce Entertain You’s Wow Bao announced an investment by Valor. In December, the chain opened a Gold Coast location with fully automated Eatsa technology. At that Wow Bao, customers order and pay at a kiosk and then retrieve their own food from a cube that resembles a microwave.

Roti CEO Carl Segal said his chain will experiment with Eatsa but won’t go fully automatic. “There’s a human element that will always be there,” he said in an interview. “It’s an exciting opportunity to figure out how to blend in tech without sacrificing the hospitality component.”

Segal said the Valor money will also help Roti fast-track its national expansion. The 34-location chain, which has 17 restaurants in the Chicago area and 12 in the Washington, D.C., area, has also dipped a toe into New York City, Dallas and Minneapolis. Segal plans to open 12 more locations this year and another 15 to 20 in 2019. “We’re continuing to look for more growth markets,” he said.

Segal, a former Potbelly Sandwich Works executive who took the helm of Roti in 2014, said he first met Valor CEO Antonio Gracias when the investor invited him, along with Mats Lederhausen, the chain’s chairman and co-founder, to dinner at his home.

“We sat and talked about the changing face of technology in the restaurant business,” Segal recalled, noting that he found Gracias and the Valor team “to be warm, rational and understanding.”

“There are plenty of people willing to give you money, but it’s not easy to find a partner who’s interested in the growth of the organization from the inside and who understands that restaurants are a different kind of business because of the human component,” he said.

As part of the investment, Jon Shulkin, a Valor partner and its CFO, will join Roti’s board of directors.

“From the first time we first met (Lederhausen and Segal), we knew there was something really special behind the brand,” Shulkin said in a statement. “In addition to the leadership, the food and customer experience sets Roti apart from any of the other players in the space.”

Roti, which was founded in Chicago in 2007, and Segal have spent the past couple of years gearing up for an expansion he says will eventually include hundreds of locations. The chain has changed its menu, ditched the horizontal rotisseries on which it previously grilled its meat and, accordingly, tweaked its name to Roti Modern Mediterranean from Roti Mediterranean Grill.



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